Gas Natural Inc. (NYSE MKT: EGAS) of Mentor said Richard M. Osborne, the company's CEO and chairman of the board of directors, stepped down from those roles effective Thursday, May 1.

Osborne will continue as a member of the board of directors of Gas Natural, a holding company operating distribution businesses that serve about 73,000 natural gas customers in seven states.

Vice chairman W.E. “Gene” Argo was appointed chairman. Gas Natural did not name a new CEO. Gregory J. Osborne, the son of Richard Osborne, will lead the company and will continue to serve as president and chief operating officer, Gas Natural said in a news release.

Gas Natural said in the release that said company officials and Richard Osborne “are currently in discussions concerning a severance arrangement.” The company said it will “announce the terms of any agreement if and when reached.”

In a statement, Richard Osborne said, “I am extraordinarily proud of the accomplishments of the company, our employees and all we have achieved over the years. Of note was our strong performance in 2013. It has been an honor to serve as Gas Natural's Chairman and CEO. Nevertheless, I have made what has been a very difficult decision for me and decided that it is best for Gas Natural if I turned over leadership of the company. I look forward to continuing to serve on the board and see our company continue to grow.”

Richard Osborne is in the process of selling more than 200 properties — most of them in Lake County — that will be for sale as part of a proposed agreement to settle debts that he and his business entities owe to RBS Citizens.

Last November, the Public Utilities Commission of Ohio ordered an investigative audit of two subsidiaries of Gas Natural and all related companies, citing concerns about the companies' internal controls, the propriety of their executive compensation system and alleged self-dealing by management.

Crain'sreported last month that the company in recent months “has made changes to its procedures and internal controls, retained a firm to consult it on regulatory matters, made four hires to improve its reporting and underwent PUCO training.”

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